Intel Corporation (INTC) shares closed at a record high of $133.99 on Thursday, surging 10.64% in the final trading session before the Juneteenth holiday. The rally was fueled by President Donald Trump's announcement that Apple Inc. (AAPL) has agreed to collaborate with Intel on chip design and production in the United States. The news marks a significant milestone in Intel's long-running effort to revitalize its semiconductor manufacturing business and compete with Taiwan Semiconductor Manufacturing Co. (TSM).
Apple Deal Sparks Optimism
President Trump's statement, made during a public appearance, indicated that Apple would partner with Intel to design and manufacture chips domestically. Neither Apple nor Intel commented on the specifics, leaving investors to speculate on the scope, timeline, and financial implications of the arrangement. According to Reuters, a potential deal could provide Intel with consistent, high-volume orders, helping the company narrow the gap with TSMC, the world's leading contract chipmaker.
The announcement comes at a critical time for Intel, which is aggressively marketing its foundry services as a viable alternative to TSMC. Market participants viewed the Apple news as a tangible sign that Intel's turnaround strategy is gaining traction, moving beyond mere rhetoric. The stock's sharp 8.45% decline on Tuesday was more than offset by gains of 3.46% on Wednesday and the 10.64% surge on Thursday, resulting in a weekly gain of approximately 7.6% from the previous Friday's close of $124.57.
Foundry Progress and Technical Updates
Intel also provided key updates on its manufacturing technology. The company announced that its advanced 18A-P node has entered risk production, an early phase before full-scale manufacturing. Intel stated that the 18A-P process delivers 9% better performance at the same power level or reduces power consumption by 18% for equivalent performance. Naga Chandrasekaran, head of Intel Foundry, described the milestone as part of a long-term journey, underscoring Intel's commitment to its foundry ambitions.
Additionally, Intel appointed Seok-Hee Lee as executive vice president of Intel Foundry, where he will oversee advanced packaging, system integration, and back-end manufacturing. Advanced packaging, which involves integrating multiple chips into a single package to enhance performance and reduce power usage, is a key differentiator in the foundry market. CEO Lip-Bu Tan described the capability as a "defining capability" for Intel. Lee expressed confidence in Intel's unique position to lead in this area.
Market Context and Risks
The broader semiconductor sector rallied on Thursday, with the Philadelphia Semiconductor Index rising 6.4%. The Nasdaq Composite added 1.91%, while the S&P 500 gained 0.93% for the week. Nvidia (NVDA) and Advanced Micro Devices (AMD) also traded actively, as TSMC continued to benefit from strong AI-driven demand, maintaining its leadership position that Intel is striving to challenge.
Despite the optimism, risks remain. The lack of official confirmation from Apple or Intel leaves investors uncertain about the scale, timing, and profitability of any potential deal. Analysts at Bernstein, led by Stacy Rasgon, suggested that initial work for Apple would likely be limited to small-volume, lower-priority chips. Rasgon emphasized that Intel still needs to "prove their mettle," noting that "the first step is always the hardest." Intel itself warned this week that its manufacturing push carries risks from intense competition, substantial capital expenditure, and the complexity of new process technologies.
Investors will be watching closely when U.S. markets reopen next week for further updates from Intel or Apple, including clearer volume projections and evidence that 18A-P and packaging advances are translating into revenue. Intel's last guidance called for second-quarter revenue in the range of $13.8 billion to $14.8 billion. The next earnings report will provide a clearer picture of how much of the recent optimism is already priced into the stock.
